Influence, Interactions and Heterogeneity: Taking Personalities out of Monetary Policy Decision-making


  • Arnab Bhattacharjee,

    1. Heriot-Watt University
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  • Sean Holly

    1. University of Cambridge
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    •  The Editor and two anonymous referees have made numerous constructive comments that helped us revise and improve the paper substantially. Their contribution is gratefully acknowledged. Besides, the paper has benefited from comments by Parantap Basu, Luc Bauwens, Beata Bierut, John Driffill, George Evans, Petra Geraats, Jim Hamilton, Stefan Gerlach, Petra Gerlach-Kristen, Pierre-Guillaume Méon, Charles Nolan, Francisco Ruge-Murcia, Chris Spencer and Mike Wickens, as well as participants at the Money Macro and Finance Research Group 44th Annual Conference (Dublin, 2012) and Royal Economic Society's 2012 Annual Conference (Cambridge, 2012). Revisions from a previous draft have also benefited from comments and suggestions received at the Norges Bank Research Workshop on Monetary Policy Committees, EC2 Conference on Econometrics of Monetary Policy and Financial Decision Making, and seminars at Durham University and University of St Andrews. Sean Holly wishes to acknowledge financial support under ESRC Grant ES/I031626/1. The usual disclaimer applies.


It is widely believed that setting monetary policy through a majority voting committee has major benefits. A monetary policy committee can take personalities out of monetary policy decisions. Critical to understanding these claims is an assessment of how such a committee functions. In this paper we examine interactions and influences between committee members when there is heterogeneity among members. We are able to identify significant interactions and directions of influence among Monetary Policy Committee members at the Bank of England.